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Daily economic digest from Forex.ee

The EUR/USD pair remains optimistic at the end of this week after volatile session, witnessed a day before. Yesterday, as it was widely expected the ECB kept its interest rate unchanged at 0% level, however, hawkish comments of the ECB President M.Draghi exerted notable support to the common currency. During the accompanying press conference, the head of the CB noted the acceleration of economic growth and positive dynamics of inflation, which moves in the direction of its target level, as indicated by recent economic data. However, Mr. Draghi expressed some concerns regarding higher volatility on the FX-market, which may cause additional uncertainty in economic stability. Talking about rates and further changes in policy of the Bank, the head of the regulator stressed that current level of interest rate will remain unchanged for an extended period, while upcoming changes in forward guidance are still in the very early stage and need to be discussed. However, the pair lost its positive traction and eased some of its previous gains, following comments of the US President, who said that wants to see a stronger dollar and recent comments of Treasury Secretary S.Mnuchin were misinterpreted. On the other hand, it seems that the downside momentum appeared short-lived and the pair regained positive tone, having recovered the most part of its recent losses. Looking ahead, today the EU economic calendar will remain relatively silent, while the US will bring bloc of important data releases during the NA session, which will help the pair to form its further short-term trajectory.

The GBP/USD pair have recovered the most part of yesterday’s retreat and re-entered the area of its post-Brexit highs, marked at 1.4345 spot. Recent decline of the pair is mostly explained by comments of the US President, who wants to see a stronger dollar. Moreover, Mr.Trump also noted that recent comments of the US Treasury Secretary S.Mnuchin were taken out of context. However, further downside trend lacked any momentum and the pair regained its positive mood, as recent weaker-than-expected US data are still exerting negative pressure on the greenback. Now all investors’ attention shifts towards the UK preliminary GDP report, while the US preliminary GDP data and durable goods orders will also be able to bring some directional impetus during the NA session.

The USD/CAD pair came under renewed bearish pressure during Asia and eased the most part of its recent recovery. Yesterday the pair bounced off its 4-month lows, marked at 1.2282 spot, on the back of comments of the US President D.Trump, who stated that wants a stronger buck. However, the pair failed to keep its positive tone and again came under selling pressure as investors are digesting yesterday’s positive Canada retails sales numbers and disappointing data from the US housing market. On the other side, further retreat of the pair looks fragile on the back of correction of oil prices from its multiyear tops, marked a day before, that negatively affects commodity-linked loonie. Today we will have another busy session ahead, as both neighboring economies have prepared important data releases, which will help the pair to form its further near-term trajectory.

The USD/JPY pair follows broad market trend at the last working day of this week, having lost the most part of recovered points. Yesterday the pair received notable bullish impetus, having bounced off its 4-month lows, located at 108.50 mark, on the back of comments of the US President, who wants to see a stronger dollar. However, the rebound was short-lived and the pair again came under bearish pressure, as the US dollar’s weakness is still being in play. However, further downside trend of the pair may also appear limited, as market participants are digesting BoJ monetary policy meeting minutes, which revealed that the regulator still intends to keep highly accommodative financial conditions, as inflation level is still far away from its 2% target level. On the data front, today the US economic calendar will offer us preliminary GDP and durable goods orders, which will be able to bring some fresh trading opportunities during the NA session, while US dollar price actions will remain the key driving factor for the pair this Friday.

Major events of the day:

Prelim. UK GDP – 11.30 (GMT +2)

US Core Durable Goods Orders – 15.30 (GMT +2)

Prelim. US GDP – 15.30 (GMT +2)

Canada Core CPI – 15.30 (GMT +2)

BoE Governor M.Carney’s Speech – 16.00 (GMT +2)

Support and resistance levels for the major currency pairs:

EURUSD S. 1.2258 R. 1.2606

USDJPY S. 107.99 R. 110.39

GBPUSD S. 1.3925 R. 1.4451

USDCHF S. 0.9210 R. 0.9566

AUDUSD S. 0.7943 R. 0.8159

NZDUSD S. 0.7264 R. 0.7422

USDCAD S. 1.2238 R. 1.2458

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